Editorial: Data dash

SummaryData services are the future for telecom but India seems to be under-prepared for this

With the rise in global smartphone sales, the writing on the wall for mobile networks should be clear—shift to data. The Ericsson Mobility Report June 2014 projects voice services to peak by 2015 and then decline and reach 2011 levels by 2019. Last year alone, globally, of the 6.8 billion mobile subscriptions, 2.3 billion were enabled for mobile data. As per the report, mobile data subscriptions are set to rise to nearly 5.5 billion by 2019. Phone calls via mobile networks, therefore, will soon dry up given apps like Viber and Skype already allow users to make uncharged voice and video calls—to other users—through mobile internet. Even a Viber or Skype call to a phone which doesn’t have these apps works out to be cheaper than using the voice service. So, why would subscribers pay a network for data and voice services when just data enables all the voice/video calls they want to make?

According to IDC, India saw an 186% increase in smartphone sales in Q1 2014 over Q4 2013, making it the fastest-growing smartphone market in the world. Thus, its potential for migration to data remains huge. But Indian telcos are ill-poised for such a shift given how inclement the country’s telecom policy is. The government, so far, has released less than adequate amounts of spectrum needed for a competitive mobile data market while the bulk remains idle with Defence. Besides, under the current policy, once the spectrum licence expires for a circle, it is to be auctioned again. Both of these factors have led telcos to bid unreasonably high for the resource, thanks to the artificial shortage created by the government.